Decision delayed on NatWest bank charge case

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A court case into whether bank penalty charges are inherently unfair has been adjourned without arguments being heard.

Tom Brennan, a recently-qualified barrister, is seeking damages from NatWest after he was charged £2,500 for bounced debits while still a student.

At the City of London county court today, Judge Peter Simpson said that insufficient time had been provided for the case to begin and delayed it until an unspecified date.

NatWest has already offered to refund Mr Brennan and pay an addition £1,500 in compensation, but he is adamant that the case should go to court over the "principle" of supposedly unfair charges.

"The information that I have is that it will cost £2.50 or thereabouts for a bank to bounce a Direct Debit. They charged me £38," he told BBC Radio Five Live.

"I think about all the other people in this situation, particularly those who have responsibilities like a mortgage, like a family, and I think in principle it is far too important for me to abandon it at this stage.

"Provided I keep winning and I am able to avoid the costs the other side, then I'm quite happy to go on and on and on," he said ahead of today's court adjournment.

Commenting on the case, Peter McNamara, the former managing director of personal banking at Lloyds TSB warned that any precedent decisions could harm UK consumers in other ways.

"Very roughly speaking around a quarter of customers will pay unauthorised overdrafts a year, and the amount of money that they pay really goes a long way towards subsidising the free in credit banking that those who don't go overdrawn enjoy," he explained on the Today programme.

"There have been a couple of estimates and they put the total revenue that the banks make in the UK out of unauthorised overdrafts at the £3-4 billion a year mark, and that's a huge sum of money.

"If those fees, or the extent of those fees, come substantially under threat the banks will be looking round for other ways to recover that revenue stream from other types of charges," he said, hinting that the future of 'free' bank could be under threat.

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